BNP Paribas structured, tokenized, and distributed a bond, the proceeds of which aim at refinancing a solar energy project sponsored by EDF through its subsidiary EDF ENR. This native digital asset, issued on the public blockchain, represents the first renewable energy bond tokenization on the project financing market. This innovation will be instrumental in broadening the scope and increasing the efficiency of project financing, including better transparency of ESG data along the value chain. Solar–based electricity production is the leading energy transition segment, with several trillions of financing needs soon. Almost half of these financing needs will come from smaller projects, which are currently being underserved.
Tokenization has the potential to be a game-changer for ESG-linked financing. It provides better granularity for smaller amounts, which means that the approach can facilitate the development of smaller renewable energy projects by offering dynamic bundling opportunities to investors. It also enables greater transparency and verifiability of data across the whole value chain, which is key for ESG projects. Both the bond term sheet and ESG data are embedded in the token, representing a strong improvement in terms of verifying investors’ ESG impact.